Islamic State and the Levant is growing financially and militarily but their greatest financial triumph came in June when they captured Mosul. But how is the group funded and how did their capabilities increase?

Over the past six months, since the group began sweeping across eastern Syria and into Iraq, experts estimate that its leaders have gained access to £1.2 billion in cash – more than the most recent recorded annual military expenditure of Ireland.

"Isil is not out in the economic boondocks of Afghanistan or hidden in deserts and caves," said Paul Sullivan, a Middle East specialist at Georgetown University in Washington. "Isil is developing in a vital oil, gas and trade area of the world. It can grab as it expands."

Their greatest financial triumph came when they captured the Iraqi town of Mosul in June and looted the city's banks. Reports at the time suggested the group's fighters may have made off with £240 million, though the Iraqi government later said the heist did not occur.

Five captured oilfields provide up to £1.8 million per day in revenue, with much of the oil smuggled across the border into Turkey and Iran.

They are thought to earn up to £5 million a month through extortion of local businesses. In the past year they are estimated to have made £40 million from taking hostages, with each foreign hostage thought to be worth £3m – although the kidnappers of American journalist James Foley demanded £80 million.

Private donations from supporters in the Gulf also contribute to their funding – although Saudi Arabia and other Gulf nations have tried to make it harder to do so without government approval. During the war in Afghanistan, Saudi supporters could donate money directly at their mosque with no government supervision.

When they captured Mosul, Iraq's envoy to the UN said they obtained nearly 88lb (40kg) of nuclear material, in the form of low-grade uranium compounds seized from a scientific research facility. The nuclear material would not be easily turned into weapons.

After conquering swaths of western Iraq, Isil fighters also now control territory where 40 per cent of the country's wheat is grown. The group's members are also reportedly milling grain in government silos and selling the flour on the local market.

TACTICS & TARGETS

Militant Islamist fighters take part in a military parade along the streets of northern Raqqa province

Isil's strategy is to capture cities, occupy civilian homes, and expand their vision of a Sunni Islamic state ruled by Sharia law – meaning that it is extremely difficult for a conventional army to launch a counter-attack.

"Isil is not a state where you can hit military bases and infrastructure," said Hussam al-Marie, the Free Syrian Army spokesman for northern Syria. "They are just thugs, groups spread over the east of Syria and the desert."

Instead, military analysts suggest targeting their supply convoys, which travel by road through the desert. The convoys use artillery, tanks and Humvees in big convoys so would be easy to identify.

Key flashpoints at the moment are the towns of Marea and Azaz, north east of Aleppo, where both Syrian government forces and Isil are fighting to take control of the valuable resupply corridor into Syria's second city.

Marea is a stronghold of the Islamic Front, a coalition of Islamist groups that is among those fighting against Isil.

Azaz sits next to the border crossing with Turkey, which would be a valuable asset for the jihadists, and in the past few weeks the fighters have taken control of a string of villager near the two towns.

Their infrastructure targets are thought to include the Haditha dam in northwestern Iraq on the Euphrates River and sections of the 600,000 barrel-a-day pipeline running to Turkey, which hasn't operated since March. The North Fertiliser Plant in Baiji, 130 miles north of Baghdad, which a Texan company won a contract to revamp in 2011, could also fall under their control – as could cement plants in the north.

And once they control an area, they are careful not to repeat the mistakes made by its predecessor, the al-Qaeda-linked Islamic State of Iraq (ISI), in 2003.

Then, ISI seized control of several cities in Iraq as it fought the allied invasion, but it quickly lost them again when locals rebelled against them because their practices were too extreme.

This time Isil has been seeking to win hearts and minds. In the territory it controls, it has been quick to eradicate policies and practices that locals most hated when they were under Baghdad's rule. In Mosul, for example, corruption in public offices and financial institutions was rife.

Isil has since cracked down on officials taking bribes to do their jobs and hired an "army of accountants" to monitor the financial accounts of banks and ensure they are not embezzling funds.

MILITARY MIGHT

Isil is thought to have between 7-12,000 fighters, of whom 3,000 are foreign. A quarter of those are estimated to be British, although Belgium is the largest per-capita European "source" of fighters.

The extremist jihadists are using tanks, howitzers, and armoured personnel carriers seized from Iraqi arms depots in new offensives to wipe out the government's last outposts in north eastern Syria. Weapons seized from Iraq, many originally provided by the US, are now changing the dynamic of the three-year-old struggle in Syria, according to the report by IHS Country Risk.

And every fighter reportedly has three sets of M16 rifles and body armour, captured from Syrian and Iraqi government forces.

LEADERSHIP

Abu Bakr al-Baghdadi

Isil is run like a terrorist bureaucracy, with Abu Bakr al-Baghdadi, the self-proclaimed Caliph, at its head.

Born in Samarra, Baghdadi was studying at the University of Islamic Sciences in Baghdad when the US invaded Iraq in March 2003. He was not thought to be connected to either al-Qaeda or its local offshoot in the early years of resistance. But by late 2005 he had been captured as a suspected mid-ranking figure in the anti-US Sunni insurgency, and he later rose to lead al-Qaeda in Iraq before splitting with them to form Isil.

He has since established a team of obedient Islamist mandarins – everything from prisoner management to suicide operations is delegated to his deputies.

"He thinks very clearly about what he is doing. He is deeply ideological and committed. He is also very determined to make himself into the one true ruler of Sunni Islam."

At the top is a "cabinet" of experienced military officers.

Abu Ali al-Anbari was a major general in the Iraqi military under Saddam Hussein. Under Baghdadi he is now charged with managing the Syrian territories currently under Isil control.

Another former officer from Saddam's army is Abu Muslim al-Turkmani, who was a lieutenant colonel in military intelligence. The finances of the group's Iraqi provinces are managed by a man calling himself Abu Salah.

Details of the Isil leadership structure were unearthed after documents were captured during a raid on the group's positions in June.

They revealed that a series of other deputies have been assigned to a variety of roles befitting a major terrorist organisation – including the oversight of improvised explosive devices (IEDs) and caring for the families of "martyrs".

Beneath the "cabinet" level there are reportedly approximately 1,000 medium and top-level field commanders. Salaries reportedly range from $300 to $2000 per month depending on the job post.

SOCIAL MEDIA

James Foley

The fate of James Foley marked a grim "high point" for Isil's social media strategy – the culmination of a macabre form of PR campaign.

The internet is used to both publicise its actions – through YouTube videos, Twitter and Facebook – and also to recruit new members.

Abu Bakr al-Baghdadi, leader of Isil, appeared in a video in July in which he announced at a mosque in Mosul that the organisation was changing its name from Isis to Islamic State, and aimed at controlling a swathe of the Middle East "up to Rome".

The actions of his foot soldiers are also promoted on social media.

Crucifixions are posted on Twitter, mass killings photographed, and foreign jihadis have even pioneered a new type of "selfie" involving the decapitated heads of opponents.

Fighters in the field use sites such as Ask.fm to hold question and answer sessions with those considering travelling to the region – where wannabe soldiers ask "Are the bugs a problem?" and "Can I buy a smartphone there?"